Affirm soared as much as 47% on Monday after the buy-now-pay-later fintech partnered with Amazon.- Amazon customers will now be able to split purchases over $50 into monthly payments.
- The offering is currently in test mode and will be rolled out more broadly in the next few months.
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Shares of Affirm soared as much as 47% on Monday after the buy-now-pay-later fintech inked a partnership with Amazon.
Customers that make a purchase of more than $50 on Amazon will be offered the Affirm payment option at checkout, often with 0% interest, and no late fees.
Amazon said the Affirm payment offering is currently being tested among certain customers, and will be broadly rolled out in the next few months.
"By partnering with Amazon we're bringing the transparency, predictability and affordability that Affirm provides today to the millions of people who shop on Amazon.com in the U.S.," said Eric Morse, senior vice president of sales at Affirm. "Offering Affirm's alternative to credit cards also delivers more of the payment choice and flexibility consumers on Amazon want."
The move comes amid a surge in popularity for buy-now-pay-later services, and as companies rush to offer the service to customers. While PayPal has built its own in-house option, Square purchased Afterpay for $29 billion earlier this month.
Buy-now-pay-later services allow customers to make monthly installment plans on purchases of goods and services, usually with 0% interest payments and no later or hidden fees. Merchants are interested in offering the service because it can lead to increased sales among those who may be on a tight budget.
Apple recently partnered with Affirm to bring its buy-now-pay-later service to Canadian customers of the iPhone, iPad, and Mac, and is also working on offering a similar payment option in the US, according to reports.
The partnership with Amazon is welcome news for Affirm investors, as the company looks to diversify away from its concentrated base of Peloton users that helped fuel growth for the company. On Friday, shares of Affirm sold off after Peloton lowered the price of its bike by a few hundred dollars.